Attached files

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) X OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period
ended September 30, 2012

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT For the transition period
from to

Commission file number 0-1937

OAKRIDGE HOLDINGS, INC. (Exact
name of Registrant as specified in its charter)

MINNESOTA

41-0843268

(State or other jurisdiction of

(I.R.S. Employer

Incorporation or organization)

Identification Number)

400 WEST ONTARIO STREET, CHICAGO, ILLINOIS

60654

(Address of principal executive offices)

(Zip Code)

(312) 505-9267 (Issuers telephone number)

(Former name, former address and former fiscal year, if
changed since last report)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days

[X] Yes
[ ] No

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files.)

[X]
Yes [ ] No

Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes
[X] No

Indicate by check mark, whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 or the
Exchange Act.

Large Accelerated filer [ ]

Accelerated Filer [
]

Non-accelerated filer [ ]

Smaller reporting company [X]

(Do not check if a smaller reporting company)

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date:

The number of shares outstanding of Registrants Common Stock
on November 12, 2012, was 1,431,503.

OAKRIDGE HOLDINGS, INC.

FORM 10-Q

For the quarter ended September 30, 2012

TABLE OF CONTENTS

PART I.

Financial Information

2

ITEM 1.

Condensed
Consolidated Financial Statements:

2

(a)

Condensed Consolidated Balance
Sheets as of September 30, 2012 (unaudited) and June 30, 2012(audited)

2-3

(b)

Condensed Consolidated
Statements of Operations for the three months ended September 30, 2012 and
2011 (unaudited)

4

(c)

Condensed Consolidated
Statements of Cash Flows for the three months ended September 30, 2012 and
2011 (unaudited)

5

(d)

Notes to Condensed Consolidated
Financial Statements

6-9

ITEM 2.

Managements
Discussion and Analysis of Financial Condition and Results of Operations

10

ITEM 3.

Quantitative and
Qualitative Disclosures about Market Risk

13

ITEM 4.

Controls and
Procedures

13

PART II.

Other Information

14

ITEM 1.

Legal Proceedings

14

ITEM 1A.

Risk Factors

14

ITEM 2-4.

Not Applicable

14

ITEM 5.

Not Applicable

14

ITEM 6.

Exhibits

14

SIGNATURES

15

1

PART I .

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

OAKRIDGE HOLDINGS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS

September 30,

June 30,

2012 (unaudited)

2012 (audited)

ASSETS

Current assets:

Cash & cash
equivalents

$

510,284

$

374,861

Restricted cash

38,081

86,915

Receivables, net

1,367,676

1,179,851

Inventories:

Production, net

5,025,704

6,046,477

Cemetery, mausoleum space and markers

586,426

619,530

Other current assets

70,507

54,586

Deferred
income taxes

178,000

242,000

Total current assets

7,776,678

8,604,220

Property, plant and equipment:

Property,
plant and equipment, at cost

7,096,106

7,073,242

Less accumulated
depreciation

(4,795,219

)

(4,741,669

)

Property, plant and
equipment, net

2,300,887

2,331,573

Other assets:

Preneed trust investments

2,338,402

2,326,926

Cemetery
perpetual care trusts

5,609,326

5,475,078

Deferred income taxes

703,000

703,000

Deferred
financing costs, net

43,877

45,813

Other

7,549

7,549

Total other assets

8,702,154

8,558,366

Total assets

$

18,779,719

$

19,494,159

See accompanying notes to the condensed consolidated
financial statements

2

OAKRIDGE HOLDINGS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS

September 30,

June 30,

2012 (unaudited)

2012 (audited)

LIABILITIES

Current liabilities:

Lines of credit  bank

$

1,210,845

$

1,210,845

Accounts
payable

1,043,505

1,198,937

Due to finance company

1,181,738

1,456,083

Accrued
liabilities

750,629

789,110

Deferred revenue

1,489,831

1,913,926

Short-term notes payable  officers

300,000

300,000

Current maturities of
long-term debt

2,064,401

2,077,432

Total current
liabilities

8,040,949

8,946,333

Long-term debt:

Long-term debt, net of
current maturities

1,042,398

1,092,245

Convertible debentures

640,000

640,000

Non-controlling
interest in pre-need care trust investments

2,338,402

2,326,926

Total long-term
liabilities

4,020,800

4,059,171

Total liabilities

12,061,749

13,005,504

Non-controlling
interest in trust investments

5,609,326

5,475,078

Stockholders equity:

Common
stock

143,151

143,151

Additional
paid-in-capital

2,028,975

2,028,975

Accumulated deficit

(1,063,482

)

(1,158,549

)

Total
stockholders equity

1,108,644

1,013,577

Total
liabilities and stockholders equity

$

18,779,719

$

19,494,159

See accompanying notes to the condensed consolidated
financial statements

See accompanying notes to the condensed consolidated
financial statements

5

OAKRIDGE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.

BASIS OF PRESENTATION

The accompanying Condensed Consolidated Financial Statements
include the accounts of Oakridge Holdings, Inc. (the Company) and its wholly
owned subsidiaries. All significant intercompany transactions and balances have
been eliminated. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary to present such information
fairly.

Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to Securities and
Exchange Commission rules and regulations. These condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and related notes included in the Companys Annual Report
on Form 10-K for the fiscal year ended June 30, 2012. Operating results for the
three-month period ended September 30, 2012 may not necessarily be indicative of
the results to be expected for any other interim period or for the full year.

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. The most significant estimates in the financial statements
include, but are not limited to, accounts receivable and inventory reserves,
investments, depreciation and accruals. Actual results could differ from those
estimates.

2.

EARNINGS PER COMMON SHARE

Earnings per Common Share (EPS) are presented on both a basic
and diluted basis in accordance with the provisions of Accounting Standards
Codification Topic 260 - Earnings per Share. Basic EPS is computed by dividing
net income by the weighted average number of shares of common stock outstanding
during the period. Diluted EPS reflects the maximum dilution that would result
after giving effect to dilutive convertible debentures. The following table
presents the computation of basic and diluted EPS:

Three Months Ended
September 30,

2012

2011

Income (loss) from continuing
operations

$

95,067

$

(81,019

)

Average shares of common
stock outstanding used to compute basic earnings per common share

1,431,503

1,431,503

Additional common shares to
be issued assuming conversion of convertible debentures

1,600,000

Anti-dilutive

Additional income from
continuing operations, assuming conversion of convertible debentures at
the beginning of the period

$

14,400

Anti-dilutive

Shares used to compute
dilutive effect of stock options and convertible debentures

3,031,503

Anti-dilutive

Basic earnings per common
share from continuing operations

$

0.066

$

(.057

)

Diluted earnings per common
share from continuing operations

$

0.036

$

(.057

)

6

3.

COMPREHENSIVE INCOME
(LOSS)

The Company has no significant components of other
comprehensive income (loss) and accordingly, comprehensive income (loss) is the
same as net income (loss) for all periods.

4.

OPERATING SEGMENTS AND RELATED
DISCLOSURES

The Companys operations are classified into two principal
industry segments: cemeteries and aviation ground support equipment.

The Company evaluates the performance of its segments and
allocates resources to them based primarily on operating income.

The tables below summarize information about reported segments
for the three months ended September 30, 2012 and 2011:

THREE MONTHS ENDED September 30, 2012:

Aviation

Ground Support

Equipment

Cemeteries

Corporate

Consolidation

Revenues

$

3,182,614

$

771,138

$

168

$

3,953,920

Depreciation and amortization

26,236

28,750

500

55,486

Gross Margin

361,041

292,238

168

653,447

Selling Expenses

27,950

55,569

-

83,519

General & Administrative
Expenses

78,912

130,664

88,414

297,990

Interest Expense

94,886

-

21,150

116,036

Interest Income

45

3,120

-

3,165

Income (loss) before Taxes

159,338

109,125

(109,396

)

159,067

Capital Expenditures

18,589

4,275

-

22,864

Segment assets at 9/30/12:

Inventory

5,025,704

586,426

-

5,612,130

Property,
Plant & Equipment, net

1,614,591

679,702

6,594

2,300,887

Other Long Term Assets

245,877

7,947,728

508,549

8,702,154

7

THREE MONTHS ENDED September 30,
2011:

Aviation

Ground Support

Equipment

Cemeteries

Corporate

Consolidation

Revenues

$

2,070,142

$

947,860

$

-

3,018,002

Depreciation and amortization

22,036

39,000

1,032

62,068

Gross Margin

(13,089

)

399,664

-

386,575

Selling Expenses

33,989

68,123

-

102,112

General & Administrative
Expenses

67,323

174,281

72,497

314,101

Interest Expense

84,503

443

21,825

106,771

Interest Income

41

5,349

-

5,390

Income (loss) before Taxes

(198,863

)

162,166

(94,322

)

(131,019

)

Capital Expenditures

31,734

31,979

-

63,713

Segment assets at 9/30/11:

Inventory

6,763,844

594,761

-

7,358,605

Property,
Plant & Equipment, net

1,535,944

763,381

7,224

2,306,549

Other Long Term Assets

156,620

7,406,462

208,240

7,771,322

5.

FAIR VALUE MEASUREMENTS

The Company defines fair value as the price that would be
received to sell an asset or paid to transfer a liability between market
participants at a measurement date.

8

Generally accepted accounting principles describe a fair value
hierarchy that includes three levels of inputs to be used to measure fair value.
The three levels, as interpreted for use by the Company, are defined as follows:

Level 2  Inputs into the fair value methodology are based on
quoted prices for similar items, broker/dealer quotes or models using market
interest rates or yield curves. The inputs are generally seen as observable in
active markets for similar items for the asset or liability, either directly or
indirectly, for substantially the same term of the financial instrument.

Level 3  Inputs into fair value methodology are unobservable
and significant to the fair value measurement (primarily alternative type
investments, which include, but are not limited to, limited partnership
interests, hedges, private equity, real estate and natural resource funds).
Often, these types of investments are valued based on historical cost and then
adjusted by shared earnings of a partnership or cooperative, which can require
some varying degree of judgment.

Information regarding assets (principally cash and investments)
and liabilities measured at fair value on a recurring basis as of September 30,
2012 and June 30, 2012 are as follows:

The following is managements discussion and analysis of
certain significant factors which have affected the Companys financial position
and operating results during the periods included in the accompanying condensed
consolidated financial statements.

Managements discussion and analysis of financial condition and
results of operations, as well as other portions of this document, include
certain forward-looking statements about the Companys business and products,
revenues, expenditures and operating and capital requirements. From time to
time, information provided by the Company or statements made by its directors,
officers or employees may contain forward-looking information subject to
numerous risks and uncertainties. Any statements made herein that are not
statements of historical fact are forward-looking statements including, but not
limited to, statements concerning the characteristics and growth of the
Companys markets and customers, the Companys objectives and plans for its
future operations and products and the Companys expected liquidity and capital
resources. Such forward-looking statements are based on a number of assumptions
and involve a number of risks and uncertainties, and, accordingly, actual
results could differ materially for those discussed. Among the factors that
could cause actual results to differ materially from those projected in any
forward-looking statement are as follows: the effect of business and economic
conditions; conditions in the industries in which the Company operates,
particularly the airline industry; the Companys ability to win government
contracts; the impact of competitive products and continued pressure on prices
realized by the Company for its products; constraints on supplies of raw
material used in manufacturing certain of the Companys products or services
provided; capacity constraints limiting the production of certain products;
changes in anticipated operating results, credit availability, equity market
conditions or the Companys debt levels may further enhance or inhibit the
Companys ability to maintain or raise appropriate levels of cash; requirements
for unseen maintenance, repairs or capital asset acquisitions; difficulties or
delays in the development, production, testing and marketing of products; market
acceptance issues, including the failure of products to generate anticipated
sales levels; difficulties in manufacturing process and in realizing related
cost savings and other benefits; the effects of changes in trade, monetary and
fiscal policies, and laws and regulations; foreign exchange rates and
fluctuations in those rates; the cost and effects of legal and administrative
proceedings, including environmental proceedings; and the risk factors reported
from time to time in the Companys SEC reports. The Company undertakes no
obligation to update any forward-looking statement as a result of future events
or developments.

FINANCIAL CONDITION AND LIQUIDITY

The Companys liquidity needs arise from its debt service,
working capital and capital expenditures. The Company has historically funded
its liquidity needs with proceeds from equity contributions, bank borrowing,
short term notes from officers, cash flows from operations and the offering of
its subordinated debentures. For the first three months of fiscal year 2013, the
Company had an increase in cash of $135,423, compared to a $26,794 cash increase
for the same period in fiscal year 2012. As of September 30, 2012, the Company
held cash and cash equivalents of $510,284.

During the three month period ended September 30, 2012, the
Company recorded
net income after taxes of $95,067. The Company’s net cash provided from operating activities was $208,189 in the first three months of fiscal year 2013, compared to net cash from operating activities of $177,171 in the same period
of fiscal year 2012. The increase in net cash provided from operating activities during this three month period was primarily due to the reduction of inventory. Cash flow used in investing activities was $9,888 during the first three months of
fiscal year 2013 and was primarily used for the purchase of property and equipment. Net cash used for financing activities was $62,878 during the first three months of fiscal year 2013, and was used to pay down debt and was comparable to prior
fiscal year 2012. The remaining increases and decreases in the components of the Company’s financial position reflect normal operating activity.

10

The Company had negative working capital of $264,271 at September 30, 2012, an improvement of $77,842 since June 30, 2012. The negative working capital position is due primarily to the reclassification of $1,885,731 of real estate
mortgage which is due within one year and which the company presently is attempting to refinance. At September 30, 2012, current assets amounted to $7,776,678 and current liabilities were $8,040,949, resulting in a negative current ratio of
.96 to 1.0, which was also the current ratio at June 30, 2012. Long-term debt was $1,682,398 and stockholders’ equity was $1,108,644 at September 30, 2012. The Company’s present working capital must continue to improve in order
for it to meet current operating needs.

Capital expenditures for the first three months of fiscal year 2013 were $22,864, compared with capital expenditures of $63,713 during the same period in fiscal year 2012. The cemetery operations incurred expenditures for improvements to the
mausoleum ($595), lowering straps and a jet pump for the grounds ($704), software ($174) and a copier and two vacuum cleaners ($2,802), or $4,275 in total for cemetery operations. The aviation ground support operations purchased
a welder ($9,272), hand tools for the shop ($1,454), land improvements or blacktop ($1,066), building improvements or roof repairs ($817) and technical manuals ($5,980), or $18,589 in capital expenditures for aviation ground
support operations. The Company anticipates that it will spend approximately $100,000 on capital expenditures during the final three quarters of fiscal year 2013 for repairs to the Oakridge cemetery mausoleum and equipment, and building
improvements for aviation ground support operations. The Company plans to finance these capital expenditures primarily through operating cash flows as sales continue to improve in the aviation segment.

The Company has two lines of credit facilities. As of September 30, 2012, $1,310,845 of aggregate borrowing capacity exists of which $1,210,845 was outstanding, leaving available credit of $100,000.

As indicated above, the Company believes that its financial position and debt capacity should enable it to meet its current and future cash requirements despite the need for improved working capital to meet current operating needs. However, the
Company needs to refinance its real estate mortgage by May 2013 in order to fully meet its cash requirements.

INFLATION

Because of the relatively low levels of inflation experienced this past fiscal year, and as of September 30, 2012, inflation did not have a significant effect on the Company’s results in the first three months of fiscal year 2013.

11

RESULTS OF OPERATIONS

FIRST QUARTER OF FISCAL YEAR 2013 COMPARED WITH FIRST
QUARTER OF FISCAL YEAR 2012

CEMETERY OPERATIONS:

Cemetery revenue from operations decreased $178,519 to $749,163
for the first quarter of fiscal year 2013, or 20% over the prior years
comparable period revenue of $927,682. The decrease was primarily due to
decreases in sales of markers of $72,315, foundations of $15,051, grave liners
of $44,219 and interment fees of $71,286. The increases during the quarter were
in cremation fees of $3,435, mausoleum space of $16,328 and land sales of
$6,150.

The cemetery gross profit margin decreased to 38% in the first
quarter of fiscal year 2013, a decrease of 4% compared to the corresponding
period in fiscal year 2012. The decrease was attributable to the write-down of
cemetery plot inventory during the reconciliation of cemetery plots available
for sale of $43,527.

Interest income from cemetery care funds increased $1,797, or
9%, in the first quarter of fiscal year 2013, compared to the corresponding
period in fiscal year 2012. The increase was due to increased rates earned on
funds.

Selling expenses decreased $12,554, or 18%, in the first
quarter of fiscal year 2013, compared to the corresponding period in fiscal year
2012. The decrease was caused by having one less full-time salesperson and
reduced benefits.

General and administrative expenses decreased $43,617, or 25%,
in the first quarter of fiscal year 2013 in comparison to the prior years
comparable period. The decrease was primarily due to no allocation of audit fees
of $20,000, decreased office salaries of $18,619 and contributions of $14,826.

AVIATION GROUND SUPPORT EQUIPMENT OPERATIONS:

Revenue increased $1,112,472 to $3,182,614, or 53.7%, in the
first quarter of fiscal year 2013 in comparison to the prior years comparable
period. The increase was primarily due to no problems or work stoppage on U.S.
Government contracts as in the past comparable period.

Gross profit margin increased 11% in the first quarter of
fiscal year 2013, compared to the corresponding period in fiscal year 2012. This
increase was primarily due to increased hi-lift sales, which have a higher gross
profit margin.

Selling expenses for the aviation ground support equipment
business as a percentage of sales decreased .76% of net revenues for the
comparable period. The decrease of $6,039 in the first quarter of fiscal year
2013, compared to the corresponding period in fiscal year 2012, was primarily
due to lower salaries and no allocation of fringe benefits.

General and administrative expenses in the first quarter of
fiscal year 2013 increased $11,589, or 17%, in comparison to the first quarter
of fiscal year 2012. The increase was primarily due to various small increases
less than $1,000 with the main increases being salaries of $3,640, life
insurance for employees of $2,298, and penalties for non-compliance in regards
to chassis not being able to use Jet fuel of $1,100.

12

Interest expense in the first quarter of fiscal year 2013 was
$94,886, an increase of $10,383, or 12.3%, in comparison to the first quarter of
fiscal year 2012. The increase was due to a higher finance rates for all debts.

Interest income in the first quarter of fiscal year 2013 is
immaterial.

OAKRIDGE HOLDINGS, INC.

General and administrative expenses in the first quarter of
fiscal year 2013 increased $15,917, or 22%, in comparison to the first quarter
of fiscal year 2012. The increase was due to professional fees for the fiscal
year audit of 2012, which was previously allocated to other operating segments.

Interest expense in the first quarter of fiscal year 2013 was
$21,150, a decrease of $675, or 3%, in comparison to the first quarter of fiscal
year 2012. The decrease was primarily due to the decrease in short term debt.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

An evaluation was carried out under the supervision and with
the participation of the Companys management, including the Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Companys disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the
Exchange Act)) as of the end of the period covered by this quarterly report.
Based on that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Companys disclosure controls and procedures are not
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is (i) recorded,
processed, summarized and reported within the time periods specified in SEC
rules and forms and (ii) accumulated and communicated to the Companys
management, including its Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosures because
of the material weaknesses relating to internal controls that were described in
Item 9A of the Companys Form 10-K for the year ended June 30, 2012, filed
October 16, 2012.

Notwithstanding the material weaknesses that existed as of June
30, 2012, our Chief Executive Officer and Chief Financial Officer concluded that
the financial statements included in this report present fairly, in all material
respects, the financial position, results of operations and cash flows of the
Company in conformity with accounting principles generally accepted in the
United States of America.

No change in the Companys internal control over financial
reporting was identified in connection with the evaluation required by Rule
13a-15(d) of the Exchange Act that occurred during the period covered by this
quarterly report and that has materially affected, or is reasonably likely to
materially affect, the Companys internal control over financial reporting.
Management has concluded that the material weaknesses in internal control, as
described in Item 9A of our Form 10-K for the year ended June 30, 2012, have not
been fully remediated. We are committed to implementing the
necessary enhancements to our policies and procedures to fully remediate the
material weaknesses discussed above. Due to our lack of sufficient capital, we
expect the material weaknesses to continue until our capital needs are met.

13

PART II

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

The Company is from time to time involved in the ordinary
course of litigation incidental to the conduct of its businesses. The Company
believes that none of its pending litigation will have a material adverse effect
on the Companys businesses, financial condition or results of operations.

ITEM 1A.

RISK FACTORS

Not applicable.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS

Not applicable.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.

MINE SAFETY DISCLOSURES

None.

ITEM 5.

OTHER INFORMATION

Not applicable.

ITEM 6.

EXHIBITS

The following exhibits are filed as part of this Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2012:

Newest 8-K & 10-Q Forms

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